Business

Mathematics
Mrs. Jocel Rose N. Bucahan
3RD QUARTER
 Ratio
and
Proportion
 Objectives:

a)Review th e b a si cs of ra ti o a n d p ro p o rtio n ;
b )D if fe re n tia te ra ti o fr o m p ro p o rt io n ;
c)Perform fun d a m e n ta l o p e ra ti o n s in vo lv in g
ratio and proportion;
d)Solve word prob le m ca se s in vo lv in g ra ti o a n d
proportion.
 Ratio

A ratio is a c o m p a r iso n o f t w o
numbers. We generally
separ a t e t he t w o n u m be r s in
the ratio with a colon (:).
 Ratio
S u p p o s e w e w a n t to w ri te th e
ratio o f 8 a n d 1 2 . W e c a n w ri te
th is a s 8 :1 2 or a s a fr a cti o n 8 /1 2 ,
and w e s a y th e ra ti o is e igh t to
twelve.
 Examples
1.Jeannin e h as a b ag with 3 video cassettes,
4 m arbles, 7 b oo ks, and 1 oran ge.

a) W hat is the ra tio o f b ooks to m arb les?

b)What is the ra tio of vid eoca ssette s to the
total number of items in the bag?
 Answers
a) What is th e ra tio o f b o o ks to m a rb le s?
Expressed as a fraction, with the
numerator eq u al to th e firs t qu a n tity a n d
the den om in a to r eq u a l to th e se co n d, th e
answ er w o u ld b e 7 /4. Tw o o th er w a ys o f
writing the ra tio a re 7 to 4, a n d 7:4 .
 Answers
a) What is th e ra ti o of vi d eo ca ss et te s to
the tota l nu m b er o f it em s in th e b a g ?
Ther e a re 3 vid eo ca sset te s, an d 3 + 4
+ 7 + 1 = 15 it em s to ta l. Th e a n sw er ca n be
expre ssed a s 3/1 5 , 3 to 15 , or 3:1 5 .
 Comparing Ratios
T o c o m p a r e r a t io s , w r it e
them as f r a c t io n s . T h e ra t io s
are e q u a l if t h ey a r e e q u a l
wh e n w r itt e n a s f r a c tio n s .
 Comparing Ratios

1. Are the ratios 3 to

4 and 6:8 equal?
.
 Comparing Ratios
1. Are th e ra ti o s 3 to 4 a n d 6 :8 eq u a l?
a) Th e ra ti o s a re eq u a l if 3 /4 = 6 /8 . Th es e a re
equal if th ei r cr o ss p ro d u ct s a re eq u a l; th a t is , if
3×8=4× 6 . Si n ce b o th o f th es e p ro d u ct s eq u a l
24, the an sw er is ye s, th e ra ti o s a re eq u a l.
b)Remember to b e ca re fu l! O rd er m a tter s! A
ratio o f 1 :7 is n o t th e sa m e a s a ra ti o o f 7 :1 .
 Comparing Ratios

2. Are the ratios 7:1 and

4:81 equal?
.
 Comparing Ratios
2. Are th e ra ti o s 7 :1 a nd 4 :8 1 e q u al?

a) No ! 7 /1 > 1 , b ut 4 /8 1 < 1 , s o the

ratios can't be equal.
 Proportion
A p r o p o r t io n is a n e q ua t io n
with a r at io o n e a c h s id e . It is
a s t a t e m e nt t h a t tw o r a t io s
are equal. 3/4 = 6/8 is an
example of a proportion.
 o n e o f t h e
What if
b e r s i n a
four num
prop o r t i o n i s

u n k n o w n ?
 Proportion
Whe n o n e o f th e fo u r n u m b e rs in a
proportion is u n k n o w n , cr o ss p ro d u ct s
ma y b e u se d to fi n d th e u n k n o w n
numb e r. T h is is ca ll e d so lv in g th e
pro p o rt io n . Q u e st io n m a rk s o r le tt ers
are fr e q u e n tl y u se d in p la ce o f th e
unknown number.
 Example
1. Solve for n: 1:2 = n:4
a) Usin g cr o ss p ro d u ct s w e se e th a t 2 × n
= 1 × 4 =4 , so 2 × n = 4 . D iv id in g b o th
side s b y 2 , n = 4 ÷ 2 so th a t n = 2 .
 Rate
A rate is a ra ti o th a t e xp re ss e s h o w
long it ta k e s to d o so m e th in g, su c h a s
traveling a c e rta in d is ta n ce . T o w a lk 3
kilometers in o n e h ou r is to w a lk a t th e
rate of 3 k m /h . T h e fr a c tio n e x p re ss in g
a rate h as u n its o f d is ta n c e in th e
nu m e ra to r a n d u n it s o f tim e in th e
denominator.
 Example
1. Juan ru ns 4 km in 30 m in u tes. A t th at ra te , h o w
far could he run in 45 minutes?
a) Give th e un kn o w n q u an tity th e n am e n . In th is
case, n is th e n um b er of km Ju an co u ld ru n in 45
minute s at th e gi ve n ra te . W e kn o w that ru n n ing
4 km in 30 m in u te s is th e sa m e as ru n nin g n km
in 45 m in u te s; th at is , th e ra te s ar e th e sa m e. So
we have the proportion
b) 4k m /30m in = n km /4 5m in , o r 4/ 30 = n /4 5.
 Answer
c) Fin d in g th e c ro s s p ro d u c ts a n d
setting them e q u a l, w e g e t 3 0 × n = 4
× 45, o r 30 × n = 1 8 0 . D iv id in g b o th
sides by 30, w e fi n d th a t n = 1 8 0 ÷ 3 0
=6a n d th e a n s w e r is 6 k m .
 Converting Rates
We compare ra te s just as w e co m p ar e ra tio s, b y
cross multiplyin g. W h en co m p ar in g ra te s, al w ay s
check to see w h ich u n it s of m ea su re m en t ar e
being used. Fo r in st an ce , 3 ki lom eter s p er h o u r is
very different from 3 meters per hour!
3 kilometer s/ h o u r = 3 ki lo m et er s/ h o u r × 10 00
meters/1 ki lom eter = 30 00 m et er s/h o ur b ec au se
1 kilometer eq u al s 10 00 m et ers; w e "c an ce l" th e
kilometer s in co n ve rtin g to th e u n its o f m et er s.
 m o s t u se f u l
One of the
g a n y m a th
tips in solvin
sc ien c e p r o b le m i s t o
o r
ys w rite o u t t h e u n its
alw a
when mu lt ip ly i ng ,
c o n ve r ti n g
dividing, or
o ne u ni t to a n o t h e r.
fro m
 Example
1. If Juan runs 4 km in 3 0 m in u te s, h o w m an y h ou rs
will it take him to run 1 km?
a) B e careful n ot to co n fu se th e u n its o f
measurement. Wh ile Juan 's ra te o f sp ee d is gi ve n in
terms of minute s, th e q u es ti o n is p o se d in te rm s o f
hours. Only one of thes e u n its m ay b e u se d in se ttin g
up a prop ortion . To co n ve rt to h o u rs , m u ltip ly
b) 4 km/30 min u te s × 6 0 m in ute s/ 1 h ou r = 8 km /1
hour
 Answer
c) Now, let n b e th e n u m b er of h o u rs it
takes Juan to ru n 1 km . Th e n ru n nin g 8
km in 1 h ou r is th e s am e a s ru nn in g 1
km in n h ou rs . S o lvin g th e pro p ort ion ,

d) 8 km/1 ho ur = 1 km/n hours, we have

8 × n = 1, so n = 1/8.
 Average rate of Speed
The ave ra g e ra te o f sp e ed fo r a
trip is th e to ta l d ista n ce tra ve le d
divided by the to tal tim e o f th e trip.
 Example
1. You w a nt to fin d the a v era g e sp ee d
of a Pa cific B o ttle n os e po rp ois e. Y o u are
told tha t it ca n m ov e a d ista n ce o f 8 9.7
kilometers in 3 hours.
 Answer
What is missing?

S= D/T
S= 89.7 km/3hrs
S= 29.9 kilometers per hour (kph)
Three Faces
of Mark
 Objectives:

a) Discuss the concept of buying and

selling
b) Explain the co n n e ct io n of co st , m a rk up ,
and selling price
c) Compu te fo r m a rk -u p , m a rk -o n , a n d
markdown
MARK-UP
VS
MARK-ON
 Important Terms
MU (Mark-up Amount)
SP (Selling Price)
C (Cost)
MURSP (Mark-up rate based on selling price)
MURC (Mark-up rate based on cost)
 Two types of mark-up
Mark-up
BASED ON COST

Mark-up
BASED ON SELLING PRICE
Mark-up Mark-up
BASED ON COST BASED ON SELLING PRICE
 Mark-on
It is a temporary increase in sales price because of a
forthcoming special celebration, like; Christmas,
Valentine’s Day, and New Year. During these events, the
sales price of some commodities like vegetables, fruits,
hams, and flowers trend higher because of increased
demand from people who do not ordinarily buy these.
But after the event or season, the prices return to
normal.
Mark-on

Mark-on = Present Selling Price - Original Selling

Price

Mark-on Rate = Mark-on/Original Selling Price

Markdown

Markdown = Old Selling Price - New Selling Price

Markdown Rate = Markdown/Old Selling Price

Trade Discount
VS
Cash Discount
GROSS MARGIN
4th Semi Quarter
Objectives:
1. Discuss the concept of gross profit percentage.
2. Compute for the gross margin and gross profit
percentage.
3. Explain the importance of gross profit percentage.
Why businesses do
mark-up, mark-on,
markdown, and
discounts?
What is profit?

What is loss?
 Gross Margin
The gross margin, also known as gross profit
is a company’s net sales revenue less the cost
of the good sold. This is computed using the
following formula:

Gross Margin=Net Sales Revenue-Cost of Goods Sold (COGS)

Variables involved
Sales Revenue is what the company earns
from selling its products or services.
“Net” in the term Net Sales Revenue means
that sales discount, sales allowances and sales
returns have been deducted from the Initial or
Gross Sales Revenue.
Variables involved

Sales Discounts are discounts granted to

customers.
Sales Return and Allowances are goods
returned to the company after the initial sale
due to defects or other possible reasons.
Gross Profit Percentage
Breakeven Point
Analysis
 Learning Objectives
At the end of the lesson, you should be able
to:
Define break-even
Illustrate how to determine break-even
point and sales
BREAK-EVEN POINT
It is the point at which neither profit
nor loss is made. The profit at the
break-even is zero. so,
R(x) = C(x)
It is also an indicator to figure out if a
certain business is viable or not.
BREAK-EVEN POINT
It also determines the needed
volume of products that
must be sold to attain a
balance between cost and
revenue.
BREAK-EVEN SALES
This refers to the amount
of product that must be
reached to attain a balance
between cost and revenue.
BREAK-EVEN SALES
This refers to the amount
of product that must be
reached to attain a balance
between cost and revenue..

Break - Even Sales

= SELLING PRICE X BREAK-EVEN POINT

Let's Review
Let's Review

Expenses for the

production of product
Total cost = Variable cost + Fixed cost
C(x) = Vx + F
Variable cost - expenses of producing one
unit of product.

Fixed cost - expenses for rent, utilities,

wages of employees, etc. that remain the
same no matter how much product is
manufactured or sold.
 Money received for the sale of goods or
payments for the services rendered

Revenue = price per unit X # of units

R(x) = px
It is the money earned after paying the
costs of producing and selling products or
services

Profit = Revenue - Cost

P(x) = R(x) - C(x)
According to the diagram, P
shows the Beak-even point
where the income is equal
tot the total cost, and the
profit is 0.
Real Life Scenario
The ABCD Sofa company produces sofa chairs.
The fixed monthly cost of production is P470,000
and the variable cost per sofa is P6,200. The sofa
chair sells for P10,500 per piece. For a monthly
volume of 140 sofa chairs, determine the total
cost, total revenue and total profit. What are the
break-even point and break-even sales of the
company?
Given Given: Fixed Cost = P470, 000
Variable Cost = P6, 200
Price = P10, 500

How much is the total cost?

C(x) = Vx + F
C(x) = 6,200 + 470,000
C(140) = (6,200)(140) + 470,000
= 868,000 + 470,000
C(140)j = P 1,338,000
Given Given: Fixed Cost = P470, 000
Variable Cost = P6, 200
Price = P10, 500

How much is the total Revenue?

R(x) = Px
R(x) = 10,500x
R(140) = (10,500)(140)
R(140) = Php 1,470,000
Given Given: Fixed Cost = Php 470, 000
Variable Cost = Php 6, 200
Price = Php 10, 500
How much is the total Profit?
P(x) = R(x) - C(x)
P(x) = (10,500)x - (6,200+470,000)
= 10,500x - 6,200 - 470,000
P(x) = 4,300x - 470,000
P(140) = (4,300)(140) - 470,000
= 602,000 - 470,000
= P132,000
 Given Given: Fixed Cost = Php 470, 000
Variable Cost = Php 6, 200
Price = Php 10, 500
How many sofa chairs must be sold in a month to break-
even? Revenue(x) = Cost(x)
Price of the product x = Variable Cost x + Fixed Cost
10,500x = 6,200x + 470,000
10,500x = 6,200x = 470,00
4300x = 470000
4,300 4,300
x = 109.30 = 110 sofa chairs
 Given Given: Fixed Cost = Php 470, 000
Variable Cost = Php 6, 200
Price = Php 10, 500

How much must the break even sales be?

Break-even Sales = Selling Price x break-even point
=10,500 x 110
= Php 1,155,000
 ey Takeaways
K
Brak-even Point
its the point at which neither
profit nor loss in made.
Break-even Sales
it refers tothe amount of product that
must be reached to attain a balance
between to cost and revenue.
Key Takeaways
Break-even Point
C(x) = Vx + F

Break-even sales
Selling Price x Break-even Point
COMMISSION
Learning Objectives

At the end of the lesson, you should be able to:

Define commission
Illustrate the different types of commissions
Compute commissions on cash basis and
commission on installment basis.
Solve problems involving commissions.
COMMISSION
It is a payment used mainly for salespeople

It is a percentage of the selling price of an

item sold or may be a percent of the value of
sales.
TYPES OF COMMISSION

Straight Commissions

Salary Plus Commission

Commission based on Quota

Graduated Commission
Straight COMMISSION

It is paid on every sales transaction

It is where an employee gets his

entire pay through commission
Salary Plus Commission
Most common commission structure

It is where an employee receives a base

salary an additional compensation in the
form of commission
Step 1:
Commission = Amount Sold x Rate Commission
Step 2: (if there is a salary)
Total Gross Pay = Salary + Commission

What is a Total Gross Pay?

It is the salary or hourly pay plus the commission
Find the Commission

Jaycee is a real estate agent and earns a 3% commission of

each home sale. If he sells a home for Php 2,400,000, how much
commission did he receive?
Amount of sales = P2,400,000
Commission rate = 3% = 0.03
commission = 2,400,000 x 0.03
= 72,000
Jaycee received a commission of P72,000
 Find the Total Pay
Gianna is paid a weekly salary of Php 2,800 plus a commission of
4% of the profit made by the company on the products she sells. How
much does Gianna earn in a week during which an Php 85,000 profit was
generated by her sales?
weekly salary = Php 2,800 Commission rate = 4% or 0.04
Amount of sales = Php 85,000

1. Commission = 85,000 x 0.04 = 3,400

2. Total Weekly Pay = 2,800 + 3,400 = P6,200 in a week
 Find the Commission rate

If a shoe salesman is paid a Php 250 commision on sale of Php

2,500, what is his commission rate?
Commission = P250
Amount of Sales = P2,500

Commission = Amount of sales x Commission rate

250 = 2,500 x rate
2,500 2,500
rate = 0.1
The shoe salesman commission is 10%
Commission based on Quota

Same Employees only receive a commission when

they reach a certain amount of sales or quota
those who receive this type of commission
usually earn a salary or an hourly rate in
addition to the commission
 Steps to Compute Commission Based of Quota and Total Pay

Step 1:
Commission = (Amount Sold - Quota) x Rate of Commission

Step 2: (if there is a salary)

Total Gross Pay = Salary + Commission

 Find the Total Pay

Patricia receive a basic monthly salary of Php 13,000. as a saleslady, she

must reach Php 25,000 worth of items per month. Aside from the basic
salary, she is entitled to a 6.5% commission in excess of the monthly quota.
if patricia sold Php 44,000 worth of items in a month, what is her total
earnings for the month?
Monthly Salary = Php 13, 000 commission rate = 6.5% or 0.065
quota = Php 25, 000 Amount of Sales = Php 44, 000

1.Commission = (44,000 - 25,000) x 0,065

= 19,000 x 0.065
= 1,235
2. Total Gros Pay = 13,000 + 1,235
= P14, 235
 Graduated Commission
An employee who is paid a graduated commission is
paid an increasing rate of commission as the
amount of sales increase

This commission focuses on performance and is

intended to provide bigger sales to the company
 Steps to Compute Commission under a Gradated Rate Plan

Step 1:
Calculate each level's commission; multiply each level's
sales by the level's commission rate

Step 2:
Add the products computed in Step 1 to determine the
total commission
 Find the total commissioin and total pay

Migo is earning PHp 18,000 as his basic salary and was offered a
compensation package where he gets 10% commission the first Php
30,000 sales and 12% for sales in excess of Php 30,000. On his first month,
his sales have a total of Php 45,000. How much was his commission and
total gross pay?
Basic salary = P18,000 Commission rates = 10% for P30,000
Amount of sales = Php 45,000 12% in excess of P30,000
Commission 1 : 30,000 x 0.10
= 3,000
Commission 2: (45,000 - 30,000) x 0.12 = 1,800
Total Commission: P4,800 Total Gross Pay: P22,800
 Try to Reflect

Now after discussing the different types of

commission, if you were to choose, which among the
types of commission do you want to receive? and
why?
Cash Basis
Installment Basis
the commission is
given on cash basis for if the sales is on an installment
cash sales basis, companies do not give
commission based on sales rather,
the commission is given bsed on
collection of payment made by
the costumers.
 Key Takeaways

Commission
It is a percentage of the selling price of an item
sold or may be a percent of the value of sales
Straight
Commission
It is where an employee gets his entire pay
through commission
 Key Takeaways
Salary Plus It is where an employee receive a base salary and a
Commission commission
Commission based
It is where an employee only receive a commission
on Quota
when they reach a certain amount of a sales or quota

Graduated
Commission An employee is paid an increasing rate of
commission as the amount of sales increase
Key Takeaways

" Sales success is not about convincing people to

buy a product or service they don't want. it's about
engaging with people who are interested and then
helping them make the right decision. that's the key
to repeat business and referrals."
- Dave Warawa